American Dairy (ADY) got hammered today after it lowered its second half sales outlook. I had purchased a put option, July expiration, on GMCR expecting a similar outcome, but alas, GMCR has held up well and my put option is nearly worthless. I did make one very big mistake. I should have bought enough time so that the option would not expire until after GMCR reports earnings on July 29. It still may not go down, but at least there would have been the chance for a miss.
The markets finished well, and I think the action tomorrow will go a long way in telling us whether or not the correction is over or whether the HS Top is still in play.
5 comments:
Strongly suspect that we're just headed for July 1-2 downgap (SPY 92.21-91.16) & this is just more right shoulder.
Think this is another case of the mkt usually does what it's supposed to do (complete H&S top) just not WHEN it's supposed to. How else can the mkt frustrate both bulls & bears ?
As for the website "confirmed sell signal on Friday", haven't you often found that something goes almost immediately against a recent buy or sell signal falling into your lap like a gift basket. And you didn't pull the trigger because it went against the action "signal" & made you doubt it ?
Regards,
dave
This is why it is so important to wait for a continuation move to confirm any signal, or to enter positions slowly.
It is quite common for example to get a countertrend move against a new MACD signal.
I haven't discussed on this site, but a few years ago, I hit upon an idea that I call the principle of the second signal, i.e. it is usually the second signal in a given direction that leads to the big move.
If we get a break of the 7/8 low, it should lead to more substantial selling.
Re our previous conversations about the GC i've noticed a corollary situation. Note $WTIC. 50E comes from below touches 200E & CURVES DOWN. Substantial selling follows; reassertion of the existing trend.
Conversely, 50E descends from above touches 200E & CURVES up. Very bullish.
IOW, it's sort of a failed GC or failed Death Cross (bullish).
Your thoughts ?
Regards,
dave
Dave,
Regarding the GC, I think there is something to your observation, but I would add the caveat that if the 50ema reversed again to cross up the 200ema, it would also be very bullish, in keeping with my second signal principle.
Craig
I agree, but the "beauty" of the 50E curving down after touching the underside of the 200E is it would take time to reverse & break upwards again because a 50 ma is slower moving than a 10 or 20ma.
This technique could work along with your short squeeze fire/Keltner observations.
Regards,
dave
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